This Week's Top 3 Stocks

Slowly but surely, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) crept higher this week, ending the week up 1.11%. The unemployment rate fell slightly to 7.2%, construction spending rose a higher-than-expected 0.6% in August, and durable-goods orders rose 3.7%, giving investors just enough confidence to keep the market moving higher. It doesn't hurt that high-profile earnings reports from Microsoft, Amazon.com, and Netflix were better than expected, giving bulls another reason to run higher.

On the Dow Jones Industrial Average, it was Boeing (NYSE: BA  ) tht led the way with a 7.1% gain this week. Korean Air agreed to buy $3.7 billion of aircraft to upgrade its fleet, reports have Chinese customers committing to $20.7 billion of 737 Max orders, and Boeing agreed to team up with Lockheed Martin to bid for a new long-range bomber for the U.S. Air Force. The military bid would reportedly be for around 100 bombers, with price tags of around $550 million each. Boeing would be the primary contractor, with Lockheed Martin as the primary subcontractor.

DuPont (NYSE: DD  ) was the second best performer on the Dow, with a 3.8% gain this week. The chemical and seed maker has struggled growing over the past year, but it finally showed growth on both the top and bottom line. Revenue rose 5% to $7.8 billion, and net income was $285 million. After one-time items were taken out, earnings per share were $0.45, four cents ahead of estimates. DuPont is also looking at strategic alternatives for its performance chemicals business, including a possible spinoff. This isn't a growth stock by any means, but investors looking for a steady dividend should feel a little better about their investment after last quarter's results.  

Disney (NYSE: DIS  ) rounds out the top three with a 3.1% jump this week. The home of Mickey Mouse announced that it will open a 53,000-square-foot Disney Store in China in early 2015, just in time for the opening of a theme park in Mainland China. Theme parks may not get a lot of attention from investors, but they're really what makes Disney so profitable, and their growth is key to the business' acquisitions of Pixar, Marvel, and Lucasfilm. Most studios make money on the box office, video sales, and maybe some TV showings, but Disney owns both media networks and theme parks that get great usage out of the company's characters. The future of the box office and cable TV may be in question, but the desire to have great content is certain, and that's where Disney stands head and shoulders above the competition. Theme parks just make that content more profitable than anyone else can.

International growth is key for markets
These three companies are generating a lot of their growth from overseas, where markets aren't as saturated with their products. While the U.S. economy is stuck in the mud, many global regions are beginning to pull out of recession, which could be a boon for companies prepared to profit. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery," outlines three companies that could take off when the global economy gains steam. Click here to read the full report!


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  • Report this Comment On October 27, 2013, at 7:25 AM, funfundvierzig wrote:

    Fellow FOOLS, the big news coming out of Fortress Wilmington in the week just past? DuPont's big bosses are expunging what made DuPont unique and innovative for 211 years, in short chemicals. Seems Ms. Kullman, DuPont Chieftess, prefers to run exclusively what she calls "a science-based food, fuel, and protection" boutique. To this end, she is splitting the historically poorly managed DuPont conglomerate into two poorly managed parts, with chemicals such as Teflon, TIO2, acids, and fluorochemicals dumped into one spin-off. Despite her public pleas of "urgency", the job won't get done for another year and a half. 18 months is apparently "urgent" by the standards of this lumbering, behind-the-times conglomerate which calls as home the dwarf state of Delaware.

    In dumping chemicals, Ms. Kullman is getting rid of nearly a third of her earnings and 20% of DuPont revenues based on the last full year, 2012. That's a fat $1.6 billion in PTOI, or 28.3% of total DuPont PTOI to be exact, and $7 billion in revenue.

    To pump up enthusiasm, the head of DuPont dispatched her CFO, Nicholas Fanandakis, to brag to the media, the segregated chemicals unit would be a "strong" stand-alone chemical company. What? At only an eighth the size of Dow Chemical, and less than a 10th the size of BASF, the amputated DuPont chemicals unit is hardly going to be a major global player, no matter how much public relations fluff is scattered to the winds of the media!

    Finally, in frantically trying to imitate the original Monsanto in divesting chemicals and going to seed, Ms. Kulllman is starting much too late, late by well over a decade. Nor does she have the pool of science or scientists to catch up to superior-managed Monsanto. Investors should recognise the sheer reality here. It is not promising.

    ...funfun..

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